Foreign Steel Gains Even Greater Edge Over Domestic Prices

As domestic hot rolled steel prices surpass $1,900 per ton, foreign steel imports continue to tempt U.S. buyers, according to Steel Market Update’s latest foreign versus domestic hot rolled steel price comparison. While domestic prices rise week after week, foreign prices have remained steady or declined, holding potential discounts of 16% to 44% after taking freight costs, trader margins and tariffs into consideration. Current foreign HRC prices are theoretically $315-850 per ton cheaper than domestic steel prices. The spread between domestic and foreign prices has surged since late-May, surpassing the record levels seen earlier this year.

The following calculation is used by Steel Market Update to identify the theoretical spread between foreign hot rolled steel prices (delivered to U.S. ports) and domestic hot rolled coil prices (FOB domestic mills). This is only a “theoretical” calculation as freight costs, trader margins and other costs can fluctuate, ultimately influencing the true market spread. This compares the SMU U.S. hot rolled weekly index to CRU hot rolled weekly indices for Germany, Italy and Far East Asian ports.